The deal, approved by the boards of both companies, creates a powerhouse in biopharma lab instrumentation and supplies with combined revenues of $16.3 billion and about 50,000 employees. The workforce is expected to shrink over three years, when Thermo Fisher expects to cut $250 million in costs by combining global infrastructure with Life Tech, and another $25 million by combining the companies’ commercial capabilities.

Thermo Fisher and Life Tech expect to cut $85 million in costs during the first full year of the deal, which is expected to close early in 2014.

“This is a story about two industry leaders joining forces to create an even stronger industry leader,” Marc N. Casper, president and CEO of Thermo Fisher Scientific, told analysts this morning on a conference call to discuss the acquisition. “We’ve become a technology powerhouse because we’re bringing together the leader in genomics with the leader in proteomics, with much broader offerings for customers in biopharma production, applied markets, and specialty diagnostics.”

At $76 per share, the deal falls just above the $65 to $75 per-share range that analysts had speculated as the potential price of Life Tech for a buyer, and about 12% above Life Tech’s closing price of $68 per share in Friday trading on NASDAQ. Life Tech share prices have jumped 25% since January, when the company acknowledged it hired consultants to conduct a strategic review.

Thermo Fisher said in a statement announcing the deal that it would generate “significant and immediate accretion” of 90 cents to $1 to adjusted earnings per share, which finished 2012 at a record $4.94, 19% above 2011, and Q4 2012 at a record $1.36, 14% above the year-ago quarter. For 2013, Thermo Fisher has offered adjusted EPS guidance to investors of between $5.32 and $5.46, or growth of 8% to 11% over 2012, not counting any future acquisitions or divestitures.

Life Tech finished 2012 with net income attributable to controlling interest of $430.9 million, up nearly 14% from $378.5 million in 2011, on revenues of about $3.8 billion, up 2% from 2011. The company’s Q4 revenue of $998.90 million was 1.1% below the $1.01 billion recorded a year earlier.

Driving growth, Life Tech said at the time, was record sales of its next-generation Ion Torrent sequencers, especially its Ion PGM™ instruments and Ion Proton™ System, which in Q4 2012 racked up its highest-ever revenue quarter due to growing use in clinical research; as well as the research consumables and bioproduction businesses, partially offset by sales declines the company said it expected to see in its older line of SOLiD® sequencers and qPCR royalty revenue.

Life Tech will account for 23% of revenues for the combined company before any layoffs or restructuring of product lines takes place. The rest of combined revenues will consist of lab products and services (35%), analytical technologies (24%), and specialty diagnostics (18%).

Instruments and systems are among Life Tech offerings, along with reagents, technologies for bioproduction and forensics applications, and consumables for genomics and molecular and cell biology. Life Tech’s consumables and services businesses account for 85% of its revenues being recurring—an attractive factor for Thermo Fisher, whose offerings include: analytical technologies such as mass spectrometry, liquid chromatography, and spectroscopy instruments; biomarkers and other specialty diagnostics; single-use bioprocess technologies; and laboratory products and services.

Thermo Fisher would add to its specialty or “applied” markets of food safety and environmental with Life Tech’s forensics and animal health presence.

Consumables will account for 61% of revenue for the combined company, followed by instruments and equipment (27%) and services (12%).

Another attraction of the combined company, Casper said, is the opportunity to expand its presence in emerging markets. Asia-Pacific will account for 18% of revenues for the new Thermo Fisher, compared with North America (52%), Europe (26%), and the rest of the world (4%).

“This is an important growth driver for us, especially given increased demand for healthcare diagnostics. And Life Technologies strengthens our opportunities in these high-growth regions,” Casper said.

Last year, high-growth Asia-Pacific markets accounted for 17% of total Thermo Fisher revenue, up from 15% in 2011, with China becoming the company’s second largest revenue source by geography last year at more than $700 million.

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